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Frederick N. Chase

"The minute Bush was declared the 'winner' .....
Greenspan began to loosen rates ... right in the teeth of Bush and the GOP irresponibly granting many huge tax cuts to everyone!"
"So, to give Bush his good economic news so he could cement power, Greenspan gave us free money."

Yes. See data below for the Greenspan + Bush – Twin Towers timeframe.

Date -- New Fed Funds rate

August21 2001 3.50
June 27 2001 3.75
May 15 2001 4.00
April 18 2001 4.50
March 20 2001 5.00
January 31 2001 5.50
January 3 2001 6.00
May 16 2000 6.50
March 21 2000 6.00
February 2 2000 5.75

In Easy Al's new book there is a chapter 10, "Downturn".

Most of the chapter is about his perplexity and dismay in early 2001 concerning

  • "the huge ongoing government surpluses"
  • "the disappearance of the national debt"
  • "surpluses 'as far as the eye could see' "
  • "a brave new world of minimal federal debt"
  • the daunting prospect, after the 'reducible' debt was paid off in 2006, of the government having to manage "a complex portfolio of municipal bonds, bonds issued by foreign governments, mortgage backed securities, auctioned discount-window credits, and other debt instruments" (kind of a Soverign Wealth Fund, sounds like to me – how hard is that to imagine?)
  • adding to this portfolio the “almost unimaginable accumulation” of $500 billion “each year
  • the “stark realization: chronic surpluses could be almost as destabilizing as chronic deficits”

Because of the weight of all this and more, he concluded “Spending would have to be raised or taxes cut..... ”.

So he reversed position, proposed tax cuts to Congress, and they did cut taxes – in record time.
They even included the “Bush rebate”. Easy Al had some nuances in there about a glide-path and triggers: he himself admits it was “not the best time” to propose these nuances.

Before the Bush rebate checks were in the mail, “suddenly and inexplicably, federal revenues plunged.” Soon “....red ink was back to stay”.

It just happens that Al doesn't talk about setting short-term interest rates in this chapter. He waits until his next chapter on dealing with the financial aftermath of September 11, 2001.

As far as I can see, his book doesn't mention all those rate cuts above! They were to deal with a pesky little downturn – moral hazard be damned.

Elaine Supkis

Yes, Greenspan, like all Republicans, worries about the national debt ONLY when Democrats are in charge. Bush rang up more debts than ALL PRESIDENTS IN OUR HISTORY TOGETHER. Isn't that funny?

And the worse part is, ever since 1966, all our Presidents, left, right and center, rang up debts. This is due to two things: our imperial pretensions and the Hubbert Oil Peak hitting the USA first of all nations.



Elaine Supkis

Marc's You Tube video is a good compilation of clips from TV showing clearly how the GOP has been beating the war drums against Iran.

If we read the ticker tape at the bottom of the CNN segments, it is most amusing seeing how this war talk is destroying our economy.

Big hearts come later

Thanks the for in depth fact finding on this Elaine, much appreciated.

Seems the markets today have had their say about what they really think about the 1/4pt rate cut, with the Dow at -362.

The USD index went up 23 cents to 76.69, but last night was at 76.45 -- it's lowest point ever!

If I worked at yahoo finance writing their stories, I'd have a problem explaining these things with the same old same old all the time.

They'd have articles like "Post-Halloween doldrums leave investors uneasy" instead of the belly laugh for today:

"Stock Investors Fear End to Rate Cuts" LOL

Here's a couple other interesting links:

"The Slosh Report" on TOMOs:

I thought the Denninger video from last night was entertaining. Nothing you don't already know, but he does have a great way of stating it:


Lastly, signing the petition for financial responsibilty is something anyone in their right mind should do:


Elaine Supkis

The financial petition doesn't call for an end to the empire. And who exactly voted in everyone who spent trillions of dollars?

Big hearts come later

This is all true.

In many ways it's futile except to display on the record disgust at the current system.

Same with empires - I don't think there's been a time in history were an empire said:

"Wow, look at all these signatures! I think the people really don't like what we're doing. We should stop."

oh that was a belly laugh - if only.

Elaine Supkis

We all knew perfectly well when Bush ran for office what would happen next. Clinton finally balanced the budget and Gore was going to pay it down but Bush said, 'Let's have TAX CUTS and PARTY, dudes!' The media said, 'Bush is someone you can drink beer with!' And so there are many people today who should hang their heads in shame and about 90% of them are republicans.

Elaine Meinel Supkis

EEK! The Derivative Beast's madcap dwarves have invaded my blog! Begone, foul creature of the Caves of Death!


interesting, thanks Elaine.

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Just because a crisis has not occured before doesn't mean it won't happen now.
When I mentioned devaluation of the sterling and the run on banks not so long ago mostly everyone laughed and I was greeted with the excuse that it has never happened before...like that is any proof that it was not going to have to happen!
can We really survive long term economically with our reserves and trade deficits?


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